Property in Angola
Angola officially welcomes investment and designated the National Private Investment Agency (ANIP) to assist investors and facilitate new investment. In 2003, the government of Angola replaced the 1994 Foreign Investment Law with the Basic Law for Private Investment (Law 11/03). Law 11/03 lays out the general parameters, benefits, and obligations for foreign investment in Angola, and recognizes that investment plays a vital role in the country's economic development. It encourages domestic and foreign investment by providing equal treatment, offering fiscal and custom incentives, simplifying the investment application process and lowering the required investment capital. However, investments in the energy, diamond, telecommunication and financial sectors continue to be governed by legislation specific to each sector. The 2003 Foreign Investment Law is also subordinate to decrees and regulations issued by other government ministries, thus allowing a risk of creeping expropriation by new sectoral legislation that restricts or negates investment protections offered by the 2003 Investment Law.The 2003 investment law is part of an overall effort by the GRA to create a more investor-friendly environment. Other legislative measures include the new Company Law that came into effect in April 2004 and a Voluntary Arbitration Law that has been approved but not yet implemented. The Company Law consolidates the rules applying to the incorporation of commercial companies in Angola, formerly spread amongst several laws, and the Voluntary Arbitration Law will provide the legal framework for nonjudicial resolution of disputes.
ANIP must approve foreign investment between $100,000 and $5 million. Foreign investments less than $100,000 do not require ANIP approval. The Council of Ministers must approve investments over $5 million, and any investment that requires a concession (such as oil or mining) or involves the participation of a parastatal. After obtaining contract approval from ANIP or the Council of Ministers, the investor must register the company, publish company statutes in the official gazette (Diário da República), obtain a business license, and register with fiscal authorities. Obtaining the proper permits and business licenses to operate in Angola can be time consuming. The World Bank Doing Business in 2005 report identified Angola as the most time-consuming country out of 155 countries surveyed to establish a business, requiring 146 days to register a business as compared to a regional average of 63 days.
In August 2003, the government established the “Guichet Único,” or one-stop shop, to simplify the process and reduce the time required to register a company by unifying procedures required by various government ministries under one roof. However, the Guichet Único lacks authority over the other government ministries which must approve licenses, permits, and other requirements, and thus has encountered great difficulty in expediting company registration. Nonetheless, the Guichet Único succeeding in issuing 320 new business licenses in 2005, more than double the 151 issued in 2004. In 2006, the Guichet Único plans to establish a website that will permit online registration.
There is no formal discrimination against foreign investment, but Angolan companies or other companies familiar with the bureaucratic and legal complexities of the business environment often hold an advantage. The Promotion of Angolan Private Entrepreneurs Law adopted in July 2003 gives Angolan-owned companies preferential treatment in tendering for goods, services and public works contracts. In December 2005, the government assembled a commission to oversee the creation of a stock exchange, the “Bolsa de Valores.” When operational, foreign and domestic investors should have equal access to buy shares in listed companies.
Conversion and Transfer Policies
Economic and financial reform measures in recent years have improved local access to foreign exchange and facilitated remittance and transfer of funds, but Central Bank Order 4/2003 imposes firm controls over transfer of funds abroad. While Investment Law 11/03 guarantees the repatriation of profits for officially approved foreign investment, and investors can remit funds through local commercial banks, under Order 4/2003 the Central Bank must authorize the repatriation of profits and dividends exceeding $100,000. In addition, the Central Bank can temporarily suspend repatriation of dividends or impose repatriation in installments if immediate repatriation will have an adverse effect on the country's balance of payments. Companies have complained in the past about waiting several months to remit funds abroad, but the Central Bank has loosened controls and bank service time now has been reduced to a matter of hours.
Expropriation and Compensation
The government of Angola is highly unlikely to expropriate the assets of foreign investors. That said, the government, in the past, used the failure to fulfill contractual or other obligations as justification for expelling foreign investors and expropriating their facilities. Changes in legislation and enforcement of existing laws pose some risk of reducing company profits. This is especially true in the petroleum sector, which has been subjected to local content regulations and three new petroleum laws promulgated in 2004. The legislative process can be secretive and closed to public review.
Additionally, vague provisions in some laws permit wide interpretation and application. Dispute Settlement Angola's legal and judicial system suffers from lack of capacity and is not efficient in handling commercial disputes. Legal fees are high, and most businesses avoid taking disputes to court. The World Bank’s Doing Business in 2005 survey estimates that commercial contract enforcement, measured by the amount of time elapsed between filing of a complaint and receipt of restitution, takes 1011 days in Angola. In July 2003, the National Assembly approved the Voluntary Arbitration Law (VAL) to provide a general legal framework for faster, non-judicial arbitration of disputes, except for cases expressly excluded by the law. The VAL awaits official promulgation and is not yet in effect. The US Department of Commerce’s Commercial Law Development Program has improved case management in Angola by instituting random selection of judges and a case tracking system.
Angola is not a signatory to the United Nations’ New York Convention, the World Bank’s International Center for Settlement of Investment Disputes (ICSID), or the United Nations’ Convention on for the International Sale of Goods (CISG). Angola is a member of the Multilateral Investment Guarantee Agency (MIGA), which provides dispute settlement assistance. Past MIGA efforts to resolve foreign investment disputes have proven successful.
Source: US Embassy
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